Difficulties in business are fairly common – nearly every company has to go through its rough patches. However, some challenges are more difficult than others, and the past year in particular has placed significant strain on UK businesses with rising costs to contend with. When the pressure sets in, it can be difficult to know what to do next.
At Ballard Business Recovery, our business rescue experts are here to help. Here’s what to do if your business is struggling.
Stay Calm
The first thing to remember if you’re encountering trouble with your business is not to panic. Take a clear-minded and objective look at the situation and outline where exactly your issues lie and how severe they really are.
Know Your Numbers
Before you can sit down to figure out what to do if your business is struggling, you need to get very familiar with the numbers. That doesn’t just mean how much money you have currently. You need to know detailed cash flow predictions, the amount of money owed to the business, and how much money you could reclaim by reorganising the business to be less demanding on your budget.
Understand Your Options
If you don’t know what to do if your business is struggling, we can help. There are a number of different business rescue options available to you that can help you secure the best possible result for yourself and your business’s creditors.
Business Rescue Strategies
CVA
CVA stands for Creditors’ Voluntary Arrangement. It’s an effective business rescue technique whereby an agreement is reached between a company and its creditors to pay back a share of or all of its liabilities over an agreed period. It’s a great way to help a struggling business alleviate creditor pressure by reassuring them with a realistic payment plan, without major disruption to business operation and leadership.
Administration
If a CVA isn’t suitable, Administration might be. There are two different types of Administration: Company Administration and Pre-Pack Administration. In both cases, the company will be passed into the control of an Administrator who will operate the business. The difference between the two is the end goal. Company Administration looks to rescue the company as best as possible and secure the most desirable possible result for creditors. Pre-Pack Administration results in the sale of the business on a going concern basis.
Consider Liquidating The Business
CVL
CVL, or Creditors’ Voluntary Liquidation, is an insolvency process launched voluntarily by the directors and shareholders of the company. When a business becomes unable to repay its creditors and shows no hope of returning to profitability, liquidation is the best way to look after the interests of creditors and avoid wrongful trading.
MVL
Members’ Voluntary Liquidation is a process for solvent companies as a means of shutting down the business and extracting its value. This allows shareholders to wind down a solvent business, but if the long-term future of the company is in question due to strategic, market, or commercial considerations, deciding to liquidate the company while it’s still solvent and able to fully pay all of its liabilities could be a good strategy if you see
If you’re looking for free, no obligation advice on what to do if your business is struggling, then you can get in touch with us at Ballards’ Business Recovery for help. As experienced business rescue experts and a qualified insolvency practice, we’ll be able to help clarify what you need to do in your position and highlight the best pathway forward.
